Margo Georgiadis
inherited a long list of problems when she took over as chief executive of
Mattel Inc.
MAT -2.25%
earlier this year, including a stalled turnaround, angry investors and dispirited staff.

But one of the first decisions the former Google executive will face is whether the company can afford to maintain its generous shareholder dividend and make the investments needed to fix the home of Barbie, Fisher-Price and Hot Wheels. The toy industry newcomer is expected to share her strategy at a meeting with analysts in New York on Wednesday.

With an annual payout of more than $500 million, Mattel has failed to earn enough income to cover its dividend in each of its past three years. Last fiscal year, its profit was $318 million. Mattel’s stock, down more than 28% in the past year, puts its dividend yield at 6.8%, the second-highest among all S&P 500 companies.

Margo Georgiadis, formerly at Google, brings e-commerce experience to Mattel as it tries to recover from a disappointing year.
Photo:
Reuters

Cutting the dividend this week would remove an overhang that has kept some investors on the sidelines, and it would free Ms. Georgiadis to invest in marketing and product development, some analysts said. Others believe that Mattel, with hopes for a sales surge from toys tied to the coming “Cars 3” film and Christmas still too far out, has time to make a call.

“While we would welcome such a move, we are still not convinced a cut will occur owing to the board’s dogged support of the dividend in the past,” BMO Capital Markets analyst Gerrick Johnson wrote this week. “We’ll call it a coin flip at this point.”

Ms. Georgiadis has said the board will review the dividend payment periodically. Through a spokesman, Mattel executives declined to comment ahead of the investor meeting.

Ms. Georgiadis, age 53, is getting acclimated to an industry with multiyear development cycles and long holiday buildup. That is different than the tech world of
Alphabet Inc.
’s Google, where for the past six years she led commercial operations and advertising sales in the U.S., Canada and Latin America.

What she does bring to Mattel is a better understanding of e-commerce—a dire need for Mattel as the store-based way of selling toys quickly shifts online. “She’s smarter than anyone at Mattel in terms of the digital world,” said Jim Silver, editor of TTPM.com, a toy review website.

Ms. Georgiadis has already made some changes to address a corporate culture that current and former employees say is still stuffy, slow and without accountability.

In March, she reached outside the toy industry to find a new leader for Fisher-Price, hiring Julie Masino, former CEO of the Beverly Hills bakery chain Sprinkles Cupcakes. In late May, she dismissed Mattel’s head of human resources,
Richard Gros,
and is searching for a replacement. Mr. Gros didn’t respond to a request for comment.

Mattel cruised through most of 2016 under the leadership
Chris Sinclair,
who was in the second year of a turnaround effort. But the company’s fortunes reversed in the fourth quarter as retailers had far more Barbie dolls and other Mattel toys than they needed. Mattel had to pump extra money into retailers to clear merchandise. The fourth-quarter wiped out annual bonuses for top executives.

A Hot Wheels display at Mattel’s showroom at the North American International Toy Fair in 2015.
Photo:
Mark Lennihan/Associated Press

Mattel hired Ms. Georgiadis for the job in January, passing over Chief Operating Officer
Richard Dickson,
who was given a $1 million retention bonus and $5 million in grants to stay on. Mr. Sinclair, meanwhile, moved into the executive chairman role, where he will collect a $1 million salary and remain eligible for bonuses.

In securities filings, Mattel said it wanted to keep Mr. Sinclair on for continuity and institutional knowledge of Mattel, and Mr. Dickson for his marketing skills and oversight of brands. Still, current and former executives said they were frustrated by the lack of accountability regarding senior leaders who oversaw last year’s holiday slide.

Ms. Georgiadis is aware of the frustration, a person familiar with the matter said. But in a sign that the top two executives are working closely together, she shares the CEO office at the company’s El Segundo, Calif., headquarters with Mr. Dickson. The space has two desks, a conference table and a Barbie-themed foosball table.